iCloud & iCloud Photos · Desktop & Documents in iCloud
Why does Free Up Space suggest Open iCloud settings?
Short answer: When much of your used space is synced to iCloud, Free Up Space's Want more space? panel offers Open iCloud settings so you can turn on Optimize Mac Storage. For space right away, tap Run Tuhi.
Because a large part of what's using your space is synced to iCloud, and the best way to free iCloud files is to keep them online-only. When a Free Up Space run can't reclaim much, the Want more space? panel offers Open iCloud settings, which takes you straight to the macOS setting where you can turn on Optimize Mac Storage.
Newer versions of macOS don't let apps flip that setting for you, which is why Storage Studio opens it rather than changing it itself.
If you need the space immediately, tap Run Tuhi — its cloud step frees large downloaded files right away — or use Remove Download on a folder in Finder.